Batiçim Bati Anadolu Çimento Sanayii Anonim Sirketi : 2021 Financial Statements

(Convenience translation into English of the independent auditors' report and consolidated financial statements originally issued in Turkish

- See Note 32)

Batıçim Batı Anadolu Çimento Sanayii Anonim Şirketi and its subsidiaries

Consolidated financial statements for the period between January 1 - December 31, 2021 and

independent auditors' report

(Convenience translation of the consolidated financial statements originally issued in Turkish)

Batıçim Batı Anadolu Çimento Sanayii Anonim Şirketi and its Subsidiaries

Table of contents	Page
Independent auditors' report..........................................................................................................	1 - 5
Consolidated statement of financial position .................................................................................	6 - 7
Consolidated statement of profit or loss and other comprehensive income .................................	8
Consolidated statement of changes in equity................................................................................	9
Consolidated statement of cash flows...........................................................................................	10
Notes to the consolidated financial statements .............................................................................	11 - 71

Güney Bağımsız Denetim ve SMMM A.Ş.	Tel: [phone]
Maslak Mah. Eski Büyükdere Cad.	Fax: [phone]
Orjin Maslak İş Merkezi No: 27	ey.com
Kat: 2-3-4 Daire: 54-57-59	Ticaret Sicil No : 479920
34485 Sarıyer	Mersis No: 0-4350-3032-6000017
İstanbul - Türkiye

(Convenience translation of the independent auditors' report originally issued in Turkish)

INDEPENDENT AUDITORS' REPORT

To the Shareholders of Batıçim Batı Anadolu Çimento Sanayii Anonim Şirketi

1. Report on the Audit of the Consolidated Financial Statements

1. Opinion

We have audited the consolidated financial statements of Batıçim Batı Anadolu Çimento Sanayii A.Ş. ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at December 31, 2021, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Turkish Financial Reporting Standards (TFRS).

1. Basis for Opinion

We conducted our audit in accordance with standards on auditing as issued by the Capital Markets Board of Turkey and Independent Auditing Standards ("IAS") which are part of the Turkish Auditing Standards as issued by the Public Oversight Accounting and Auditing Standards Authority of Turkey ("POA"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics for Independent Auditors ("Code of Ethics") as issued by the POA, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

1. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

A member firm of Ernst & Young Global Limited

(1)

(Convenience translation of the independent auditors' report originally issued in Turkish)

Key audit matters	How the key audit matter addressed in the
Auditor's response
Measurement of tangible assets by revaluation
model
As of December 2021, the Group has continued to	We have	evaluated	the	qualifications,
measure the lands at fair value in accordance with	competencies and impartiality of the real estate
the results of the valuation studies conducted by	appraisers appointed by the management. In our
an independent valuation company licensed by	audit, the appropriateness of the methods used by
the CMB and the net book value of the related	the valuation experts in the aforementioned
assets increased by 1.684.039.614 TL in its	valuation reports, which constitute the basis for the
consolidated financial statements.	fair values of the relevant tangible fixed assets
The complexity of these transactions and the fact	measured according to the revaluation model, has
been evaluated.
that they involve significant judgment and
assumptions are important to our audit and have	In order to check the compatibility of the
therefore been identified as a key audit matter by	assumptions used by the independent valuation
us.	experts during the valuation with the market data,
Detailed explanations about tangible fixed assets	the valuation experts of another organization,
which is included in the same audit network as our
can be found in Note 2 and Note 12.	organization, were included in the studies. In this
	framework, as a result of the studies and
	examinations carried out by the experts on the real
	estate valuation calculations in question, we have
	evaluated whether the estimations and
	assumptions used in the valuation report are
	within an acceptable range of fair value, as
	assessed by the Group's independent valuation
	experts.
	The appropriateness of the appraisal method was
	evaluated by calculating the land and buildings
	together with their intended use, and the square
	meters used in fair value calculation and the title
	deeds of the related real estates were compared.
	In addition, within the scope of the above
	specializations, the appropriateness of the
	information in the financial statements and the
	explanatory notes in accordance with TAS 16 has
	been evaluated.

(2)

A member firm of Ernst & Young Global Limited

Deferred tax assets recognized in accordance	How the key audit matter addressed in the
with the income tax deduction	Auditor's response
As explained in Note 25, the Company utilized	In order to examine the assumptions of the
from tax reductions within the scope of the Law	management on the subject and the calculation of
No. 6637 on the Amendment of Certain Laws and	the deduction from the cash capital increase, the
Decrees.	tax experts of another organization that is included
	in the same audit network as our company were
The Group has interest incentives that can be	included in the audit team and the calculations of
deducted from the corporate tax obtained from the	the related deferred tax assets were examined by
cash capital increase in the paid or issued capital	them.
amounts within the scope of the law.	During the evaluation, future profit projections and
As of December 31, 2021, the Company has	periods of unused tax assets in current periods are
deferred tax assets amounting to TL 46.640.130	considered.
calculated based on the cash capital increase	Within the scope of our audit, the key assumptions
interest incentive, as stated in Note 25 to the	used by the Company management in the relevant
financial statements.	business plans were examined and their
	appropriateness was evaluated.
The subject of income tax deduction has been	In addition, the appropriateness of the
identified as a key audit matter for our audit, as it	explanations in the footnotes of the financial
requires evaluation and judgment.	statements in accordance with TAS 12 has also
The disclosures related to deferred tax assets are	been evaluated.
provided in Note 25.

1. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with TAS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

(3)

A member firm of Ernst & Young Global Limited